State pensions give you a regular income once you reach State Pension Age. They are based on National Insurance (NI) contributions and the amount you get will depend on how much you have paid in. State pensions are not easy to understand and here we only cover the basics. To help you, we have included plenty of pointers so you know where you can find more information.
State Pension Age
The age at which you can claim your State Pension is changing depending on when you were born. It is currently 65 for men and women and will increase to 66 by October 2020. After this it will then increase further to at least age 68. You can check your State Pension Age here.
The New State Pension
You've probably heard that some drastic changes have been made to State pensions for people who reach their State Pension age on or after 6 April 2016. These changes aim to make the system fairer and should be easier to understand. The table below summarises the main characteristics of the old and new state pensions:
Old state pension
New state pension
State pension age
Men: age 65
Women: age 60 before 6 April 2010. It then increased gradually from age 60 at 6 April 2010 to age 65 at 6 December 2018.
You can claim the Old state pension if you are:
a man born before 6 April 1951, or
a woman born before 6 April 1953
Men: age 65 prior to 6 December 2018. It is increasing gradually to age 66 between 6 December 2018 and 6 October 2020. It will then be increasing to age 67 by 2028 and to age 68 by 2046.
Women: age 65 at 6 December 2018. It is increasing gradually to age 66 between 6 December 2018 and 6 October 2020. It will then be increasing to age 67 by 2028 and to age 68 by 2046
Prior to 6 April 2018 the State Pension Age for women increased gradually from age 60 at 6 April 2010 to age 65 at 6 December 2018.
What do you get?
Basic State Pension (BSP) plus some Additional State Pension (ASP)
Flat rate payment
How much is it?
Maximum of £134.25 (BSP) plus up to around £176 (ASP) per week. The actual amount will depend on your NI record
Maximum of £175.20 per week plus any 'protected payments'. The actual amount will depend on your NI record
How many years of NI contributions do I need for the full pension?
Do I need a minimum number of NI years to qualify?
Yes - minimum of 10 years
We've explained the main changes in more detail below but you can also find out more information here.
To get the new State Pension you must:
Have been born on or after 6 April 1951 if you are a man
Have been born on or after 6 April 1953 if you are a woman
Usually have at least 10 'qualifying years' on your National Insurance (NI) record to get any State Pension - periods you have worked abroad may count towards this.
If you don't meet these requirements then you'll either receive a State Pension in line with the old system (this will be true in the first two cases), or you will receive no State Pension (third case above). In this situation you may still be entitled to pension credit, further details are available here.
This will vary for each individual depending on your NI contribution record but the full new State Pension is currently £175.20 a week. Depending on your personal circumstances you could end up with more or less than this.
As at 6 April 2016, the government looked at each person's NI contribution record to determine a starting amount under the new system. This amount is the higher of:
The amount you would have got under the old rules (including Basic State Pension and Additional State Pension, more details of which are shown below)
The amount you would get if the new State Pension had been in place at the start of your working life.
If you have been contracted out of the Additional State pension then a deduction will be applied to the above figures.
If, at 6 April 2016, your starting amount is less than the full new State Pension of £175.20 a week, then you can still build up more benefits and the amount that you receive once you reach your State Pension age may be higher than your starting amount. For each additional qualifying year that's added to your NI record before you reach State Pension age, you'll build up an additional £4.45 a week and this will continue to build up until you reach the maximum of the full new State Pension of £175.20 a week.
If however, your starting amount on 6 April 2016 is more than the full new State Pension, then you'll get this higher amount when you reach State Pension age. The additional amount above £175.20 per week is known as a 'protected payment'.
As mentioned above, you can build up further qualifying years of NI records by continuing to work but you may also qualify for National Insurance credits. These can help fill gaps in your NI records and may increase the amount of State Pension you'll get when you reach your State Pension age (assuming you would otherwise receive less than the maximum new State Pension of £175.20 a week).
The Old State Pension
The following information is included for completeness only and will not be used to calculate the State Pension for anyone who reaches State Pension Age on or after 6 April 2016.
If you will have worked for 30 years by the time you reach State Pension Age then you will get the full Basic State Pension. Even if your legal spouse has never worked, he or she can also get a Basic State Pension of up to 60% of the full amount based on your work history.
Basic State Pension
One person with full NI contribution record
One person based only on spouse's full NI contribution record
You may have earned some Additional State Pension on top of
your Basic State Pension. This amount is not fixed but is based on your NI
contributions and your earnings. Generally, if you have been in a company
pension scheme such as the Unilever UK Pension Fund, you won’t have earned much
extra Additional State Pension.
You can find how much State pension you have earned here.
You can request a statement online or by post.
Your statement will show how much Basic State Pension and
Additional Pension you have earned so far. It will also show your State Pension
Age, ie the date when you will start to receive your State pension.
One key thing to remember is that the State Pension is
taxable. If your income is more than £12,500 for the 2020/21 tax year you will
start to pay tax on this income. How much tax you pay depends on the tax rate
that applies to you. The income tax rates for 2020/21 are as follows:
2020/21 Tax Year Income Bands
£0 - £12,500
£12,501 to £50,000
£50,001 to £150,000
More information on how taxation works can be found here: